What does the term 'commitments' refer to within the EU budgeting context?

In the context of EU budgeting, the term 'commitments' refers specifically to legal obligations that the EU has to spend money in a financial year. When the EU makes a commitment, it signifies a binding agreement to allocate funds for specific programs or projects, which ensures that financial resources are earmarked for use in future budgetary periods. This mechanism helps in planning and executing budgetary policies effectively, providing certainty to beneficiaries about the available funding, and ensuring accountability within the financial system of the EU.

Understanding this definition clarifies the significance of 'commitments' in budgetary processes, as it indicates not just the intention to spend, but a formalized legal requirement that necessitates financial allocations to be fulfilled. This contrasts with cash flow management, evaluations of past spending, or predictions about future spending, as those concepts do not carry the same legal binding implications that commitments hold in the budgeting framework of the EU.